Price Elasticity of Rice and Crawfish Production

What was the percentage increase in the price of rice?

From $13 to $16.

What was the increase in crawfish production in million pounds?

From 0.8 million pounds to 1.11 million pounds.

Percentage Increase in Rice Price:

The price of rice increased by $3, resulting in a 23.08% increase from $13 to $16.

Increase in Crawfish Production:

The crawfish production increased by 0.31 million pounds from 0.8 million pounds to 1.11 million pounds.

The price increase of rice from $13 to $16 led to a 23.08% increase in price. This price increase caused producers to respond by increasing crawfish production from 0.8 million pounds to 1.11 million pounds, indicating a positive relationship between rice price and crawfish production.

The elasticity of rice price, calculated to be approximately 1.67, indicates an elastic demand for rice. This means that consumers are responsive to changes in rice prices, leading to a proportionately larger increase in crawfish production in response to a price rise.

Understanding price elasticity is crucial for producers and policymakers to predict consumer behavior and make informed decisions regarding pricing and production strategies. By analyzing the relationship between price changes and quantity demanded, businesses can optimize their operations to meet consumer demand effectively.